South Florida’s Tax Advantage Over New York is Bigger Than Ever

South Florida’s Tax Advantage Over New York is Bigger Than Ever

May 13, 2018 May 13, 2018

South Florida has always been a magnet for New Yorkers and other northerners looking to save on their taxes. Florida has some of the lowest taxes of any state in the country, while the State of New York has the highest, and New York City’s is even higher. With the strong cultural connection between the two regions (Miami is sometimes called the ‘sixth borough’) and a dramatic difference in taxation levels, South Florida is an obvious destination.

Now that President Trump’s tax plan is law, that advantage appears to be increasing, particularly for high income earners. This is because the new tax law limits the allowable deduction for state and local taxes to $10,000. And Florida is one of seven states with no state income tax.

Many wealthy New Yorkers are very concerned. The New York Post estimated that with the Trump tax changes “A Florida single resident making $10 million gets $227,619 in tax relief, while the same earner in NY gets socked with $257,177 tax hike because of the loss of SALT, under the new law.”

Even many middle class families would see substantial differences between New York and Florida. “The study showed that a typical family of four that earns $175,000 in the city will pay 25 percent of their income in taxes, compared to 14 percent for the same family of four in Florida.” says the Post.

The tax law has begun a boom of relocations. As early as November, Newsweek reported that the wealthy were fleeing to florida to avoid the approaching higher taxes.

Naturally Florida is aggressively marketing to businesses and wealthy New York residents to relocate. “The new Trump tax law is helping with our recruiting. New York is taxing the rich. Palm Beach is rolling out the red carpet,” said Kelly Smallridge, head of the Palm Beach County’s Business Board, told the Post, but in another quote a New York businessperson unabashedly called it “poaching.”

The new Trump tax law widens the already-significant disparity by limiting state income tax deductions in states like New York where those exist. Compare that to a state like Florida which has no state income tax at all.

Income taxes aren’t the only tax areas where Florida has the clear advantage. Overall, according to Politifact, Florida has the second lowest state taxes per capita, behind Alaska. Considering our local taxes are more middle-of-the-road, Florida remains an extremely tax friendly state in which to live. Meanwhile, New Yorkers pay higher taxes than any other state, according to a WalletHub study. That same study ranked Florida as number 47, just above Tennessee, Delaware, and Alaska. Exact rankings tend to fluctuate slightly depending on the methodology of a study or the way results are presented (percentage of income compared to raw dollar figures, for example.)

Rankings for 2017

BasisNew YorkFlorida
Cost of Living Index By State5110
National Sales and Excise Tax Ranking37 ($2,577)44 ($2,957)
National Income Tax Ranking40 ($1,893)1 ($0)
National Real-Estate Tax Ranking41 ($2,899)27 ($1,894)
Tax Burden By State1 (being highest in the country at 12.94%)45 (being in bottom 10 at 6.79%)

*All other rankings above on a scale of 1 to 51, with 1 being the best and 51 being the worst

Although Florida’s sales tax, about 6 percent in most of the state and 7 percent in Miami-Dade County, is higher than New York State’s 4 percent, it is still lower than New York City’s 8.875 percent. Florida doesn’t charge a state inheritance tax or other form of ‘death tax.’ Florida offers many asset protection benefits, including homestead tax credits, financial and property protection for spouses (called “tenancy by the entirety”), protection of life insurance and IRAs, and protection of property held in business entities. Florida offers property tax benefits for a primary residence, and protections against seizure of that residence in the event of bankruptcy. And incidentally, but rather unsurprisingly, Florida is also home to many top wealth strategists, tax advisors, and estate planning attorneys, many of whom followed the wealthy coming here to protect their money.

So, what’s a New Yorker to do about it all besides move to Florida? The New York State government is experimenting with a few potential tax loopholes to allow its wealthy to keep more of their money, or at least some of what their losing in new taxes. They’re investigating ways of taxing without actually calling it a state tax… like, bizarrely, funneling the revenue into a state charity. Whether this actually works or not is anybody’s guess.

TaxesNew YorkMiami
State Income Tax4 to 8.82% + New York City tax (Approx. 3.75%)None
Sales Tax4% + 4.88% NYC local sales tax7% in Miami-Dade County
Tangible Personal Property Tax (Excluding Real Estate)NoneAd Valorem tax based on category of property. Exemption of up to $25,000
Property TaxStatewide average of 1.5%, and NYC average of 0.72%Average of 1.1%
NYs STAR Homestead Exemption Vs. Florida Homestead Tax ExemptionExemption amount varies by County and income. Exemption stands only against school taxes. Tight cap on tax savings. Not applicable for $500,000+ income earnersExemption amount is same throughout Florida up to $50,000, plus Save Our Homes tax limits annual increases to 3%. No cap on tax savings or income limits.
State Estate Tax5% - 16.0% if your estate is greater than $4.187 million.None
State Corporate Income Tax7.1%, or 6.5% for small businesses5.50%
State Gas Tax43.88 cents a gallon (Top 5 Highest in the Country)36.59 cents a gallon (unleaded)

*All tax rates as of Jan. 1, 2017 or later.

Contact Us
(305) 697-7667
contact@condoblackbook.com
Request Info
By sending you agree to CondoBlackBook's Terms of Use

Your Miami Condo Awaits

Recent Posts

Introducing 501 First: Downtown Miami’s Latest Short-Term Rental Investment Opportunity
Real Estate News Introducing 501 First: Downtown Miami’s Latest Short-Term Rental Investment Opportunity
Miami is in the height of another renaissance, with more than 12 new condo building projects announced in the first six months of 2021 alone. One of these latest Miami new construction condo developments is 501 First in the heart of Downtown Miami.  Why do we think you should know about 501 First? If you love luxury real estate in a bustling metropolis, then the upcoming 501 First condo development will be worth your attention, especially if you are looking for condo investment opportunities. Miami is one of the world’s most popular destinations, as well as an international travel hub. Condo and real estate investments that allow short-term rentals and Airbnb rentals are extremely popular in a city like Miami.  We have written a lot about Miami condos that allow short-term rentals, and 501 First is one of the latest opportunities, having just launched. In fact, the 40-story tower will have no rental restrictions, allowing for short-term rentals, daily rentals, etc., making it a...
Coconut Grove Development ‘Markers Grove Isle’ Rebrands as ‘Vita’
Real Estate News Coconut Grove Development ‘Markers Grove Isle’ Rebrands as ‘Vita’
Luxury condo development project Markers Grove Isle rebranded as Vita Residences this June, after lengthy legal issues. The rebrand is a signal the Coconut Grove condo project is moving ahead after years of being stalled, making it one of the most eagerly awaited new Miami condo development projects, and a long-awaited addition to an island where nothing has been built in several decades. Sitting on the 21-acre, private island, Vita represents boutique, luxury waterfront living on Coconut Grove’s Grove Isle – forward-thinking and unlike anything built before it. Developed by Grove Isle Associates, construction on this island property is expected to begin by early 2022. Vita Grove Isle Residences If you know anything about Grove Isle, you may be curious about the design of this mid-rise project and how it will blend with the other three towers on the island. The collection of 5-story buildings will be set hugging the island’s serene eastern shoreline in modern, curvilinear...
The Best Miami Neighborhoods: Key Biscayne vs Fisher Island
Real Estate News The Best Miami Neighborhoods: Key Biscayne vs Fisher Island
Two of Miami’s most private and exclusive neighborhoods are Key Biscayne and Fisher Island. These neighborhoods share a number of similarities, as both are affluent island communities separated from the mainland Miami Metro area. And each island is designed as a private enclave for Miami’s elite. But the two also differ in many ways, due to their locations, local lifestyle, and the communities that inhabit each location.   We’ve broken down details to compare Key Biscayne versus Fisher Island based on factors that can help you choose which of the two would be most suitable for you. Take a look. And don’t miss our other Miami neighborhood comparisons at the bottom of this article.  Lifestyle: Key Biscayne vs Fisher Island Key Biscayne is a comfortable residential neighborhood located on a small island that is connected to Mainland Miami by the Rickenbacker Causeway. Once you cross the causeway into Key Biscayne, you definitely feel the tranquility of being surrounded by water, and...
Miami Building Boom 2021: These are the 12 New Condo Development Projects Planned to Date
Real Estate News Miami Building Boom 2021: These are the 12 New Condo Development Projects Planned to Date
It’s a trend we’ve been talking about since the last quarter of 2020 - waves of buyers are contributing to one of the biggest real estate booms in Miami history. As individuals and businesses escape high tax states like New York and California, and have the freedom to work from any location, luxury condo developers in Miami are announcing new project after new project.   Miami condo developers have announced over a dozen new and relaunched condo projects since the beginning of 2021. In an attempt to appeal to a wide range of new residents, each new project aims to be taller, more luxurious, and offer the most exciting set of amenities imaginable, and could bring more than 10,000 residential units to Miami over the next few years. With the real estate market in Miami in one of its most lucrative cycles yet, here’s a look at the latest condo projects proposed in Miami since January 2021 (till the time of this post): New Miami Condo Development Projects 2021 E11even Hotel and...
Surfside vs Sunny Isles Beach: Which Miami Neighborhood is Better?
Neighborhood Comparisons Surfside vs Sunny Isles Beach: Which Miami Neighborhood is Better?
If you love coastal living with walkable access to Atlantic Ocean beaches, and you want to move to a beachfront address while bypassing the hustle and bustle of South Beach, there are two beachside communities to consider when looking to make your move: Sunny Isles Beach and Surfside.  While these communities are practically next-door neighbors (with ritzy Bal Harbour nestled between them) and they share many amenities, including direct beach access to the Atlantic. Plus, they both are in prime locations that provide quick and easy access to airports, shopping, arts and culture, and outdoor living, living there could not be more different from one another.   As insiders who’ve lived in these popular Miami neighborhoods, we’ve broken down the similarities and differences between these two beautiful seaside communities in case you are looking to move to Miami. Lifestyle: Sunny Isles Beach vs. Surfside While Sunny Isles Beach and Surfside both provide residential coastal living...
Miami Condos with Shabbat Elevators
Real Estate News Miami Condos with Shabbat Elevators
Last updated June 11, 2021. Whether you refer to it as the Sabbath, Shabbat, Shabbos, or by any other term, your religious commitment to observing a holy day of rest should not prevent you from enjoying a luxury condo lifestyle in the subtropical paradise that is Miami.  For this reason, a number of condo communities provide the convenience of a Shabbat or Sabbath elevator, which is a specially programmed elevator that stops automatically on every floor during the Jewish Sabbath, from sundown on Friday evening until sundown on Saturday of every week.  This service is provided in order to accommodate the Jewish religious law that prohibits religious observers from pushing buttons or operating machinery during the Sabbath. While Miami today is known as a particularly Jewish-friendly metropolis, Jews were not even allowed to enter Miami Beach Hotels until the late 1940s. But by the 1950s they began to lay down roots in Miami Beach and to impact the economy, politics, and social flavor...